DaimlerChrysler AG Receives Approval for Feasibility-Plans to Produce MB Cars & Van in China

DaimlerChrysler AG Receives Approval for Feasibility-Plans to Produce Mercedes-Benz Passenger Cars and Vans in China

• China Executive Board established under the leadership of Dr. Rüdiger Grube for streamlining business decisions

• Prof. Jürgen Schrempp: “DaimlerChrysler significantly enhances the position on the Chinese market and reinforces its solid presence in Asia”

• Production of Mercedes-Benz passenger cars expected to begin in mid 2005

DaimlerChrysler AG received approval of feasibility-plans to produce Mercedes-Benz passenger cars and vans in China through two new joint ventures. The Company will build Mercedes-Benz E and C-Class sedans in a new facility in Beijing with long-time partner Beijing Automotive Industry Holding Company (BAIC). The Company will also build Mercedes-Benz Sprinter, Vito/Viano vans in a new facility in Fuzhou with Fujian Motor Industry Group and the China Motor Corporation. The decision is the most important step on the way to establishing the joint ventures through the National Development and Reform Commission (NDRC) for local production in both the passenger car and van segments. “This approval significantly enhances DaimlerChrysler’s position in the Chinese market and strengthens the excellent relationship we have with our Chinese partners,” says DaimlerChrysler CEO Prof. Jürgen E. Schrempp. “Local production in both the passenger car and commercial vehicle segments marks a milestone in the implementation of our business activities in China, and also reinforces our already extensive presence in Asia.” Schrempp also praised Dr. Rüdiger Grube, Member of the Board of Management, responsible for Corporate Development and China, for his work in achieving approval for the feasibility-plans.

Reinforcing the Company’s commitment to China and the importance of this market, DaimlerChrysler entrusted its Board of Management Member Dr. Grube with the responsibility for all activities in China. This demonstrates the company’s intention to more strongly harness the region’s growth potential in the passenger car and commercial vehicle segments in the future. “DaimlerChrysler is now the only international automaker in China able to produce both commercial vehicles and passenger cars here,” says Grube. “A key part of our strategy is successfully linking up the business activities of all DaimlerChrysler brands in China and creating a uniform image here.”

As part of its renewed focus and Dr. Grube’s new responsibility, the Company created a China Executive Board (CEB), which is chaired by Grube and which will help make business decision-making in the region even more efficient. The CEB is comprised of representatives from the DaimlerChrysler business units in China, as well as the sales organizations, and the financial services unit.

Medium-term plans for the planned joint venture with BAIC call for the production of Mercedes-Benz C- and E-Class sedans, with annual manufacturing capacity of up to 25,000 units. The vehicles are scheduled to begin rolling off the line in mid-2005 at a new plant located in the Beijing Development Area.

“Approval of the feasibility-plans marks an important step in the implementation of our long-term plans for growth in China, and also significantly improves Mercedes-Benz’ competitive position,” says Dr. Eckhard Cordes, DaimlerChrysler Board of Management member responsible for the Mercedes Car Group.

The Commercial Vehicles division’s planned joint venture for vans in China will include production of the Mercedes-Benz Sprinter and the new Viano/Vito van family at a new facility in Fuzhou City in Fujian Province, with a planned annual capacity of 40,000 units. Production is scheduled to begin in 2006. The members of the van joint venture are DaimlerChrysler, the China Motor Corporation and the Fujian Motor Industry Group.

DaimlerChrysler is investing EUR 1.2 billion in China for its ongoing and future projects to realize Mercedes-Benz passenger car and van production, relocate Beijing Jeep Corporation and realize the production of heavy-duty and medium-duty trucks. DaimlerChrysler and its partners will also employ approximately 15,000 people in China through the joint ventures. As part of the planning for new production activities, DaimlerChrysler is training new employees to ensure the new operations have the same high quality standards. The company has also been evaluating local suppliers to help support the new production.